Since becoming Chief Minister, Allan Bell has regularly stated that government must be prepared to take risks. This sentiment has also been supported by Minister for Policy and Reform, John Shimmin and DED Minister, Laurence Skelly. In preparing the ground for the adoption of a £50 million Economic Development package, all three warned that there could well be some failures within the various projects supported under the scheme.

The converse of this argument is for those in power also need to recognise when they have goofed and what's more to learn from the experience.

Times columnist Mathew Syed succinctly makes the case for a positive attitude to failure in the "Soap Box" feature on BBC 2's Daily Politicson 28.10.15:

The History –The Government Unified Scheme (GUS) was introduced in 2012, following lengthy negotiation with staff. It simplified the administration of some 15 different public sector pension schemes and increased some employee contributions, but made no substantial difference to their affordability or sustainability, nor indeed their fairness to taxpayers and the private sector. It followed tortuous negotiations with the unions and their members (and at a cost of well over £1 million, paid to the consultants Hymans Robertson). Shortly afterwards, it was proclaimed by government spin as a major success story, quite forgetting both the financial implications and that it constituted a desperately sad situation of "pensions apartheid" - dividing the public sector (where 90% of workers have a salary linked pension heavily subsidised by the taxpayer) against the private sector where less than 50% now apparently have any form of pension scheme applicable at all.

The Problems - Put in its simplest form, the problems with public sector pension schemes are two-fold – their funding arrangements and increasing life expectancy.

The schemes, with defined benefits relating essentially to salary and years of service, have origins dating back to the 1920’s and 1930’s – when life expectancy of approx 60 years was considerably shorter than today’s expectation of perhaps 85 years, and thus pensions – if paid at all - were paid for relatively short periods following retirement.

As a result, staff pension contributions of typically 5% of pay, and matched by the employer, were historically sufficient to fund the liabilities of these schemes. However, because life expectancy has increased so significantly and so rapidly in the past 2-3 decades (with resultant increases in long-term pension payouts) but with funding arrangements (via employee and employer contributions) having remained unchanged, these schemes are today proving to be too generous, and requiring massive additional “top-ups” from the taxpayer. They are thus unsustainable.

The annual IOM budget document is commonly referred to as the Pink Book.

Politicians see it about a week before it is presented to Tynwald for debate and ultimately approval. The public has access to it after the Treasury Minister's speech and then read or hear comment in the local media.

One PAG supporter decided to take a detailed look at the figures in the 2014-15 Pink Book and using prudent accounting drew some interesting conclusions:

It may be that the the mounting Public Sector Pension crisis is worse than thought.

In a detailed document published by the *Public Sector Pensions Authority, "IOM Government Unified Scheme 2011, Annual Report and Accounts 2012-2013" there is a gloomy set of notes at page 30 about the PSP funding gap. It is expected to "increase as a larger proportion of the Scheme's membership reaches retirement and that additional funding will be required from the Treasury".

I refer to the letter from Alan Croll last week (We’re no secrecy jurisdiction) and the faint aroma of self-interest in his assertion that tax avoidance is common sense as well as perfectly legal, his criticism of Tax Justice Network, and his statement that the Isle of Man is not a secret jurisdiction.

He is quite correct in stating that an economist’s attitude (and clearly his) is that tax avoidance is legal whilst tax evasion is illegal. However, to the ordinary man in the street, the words avoidance and evasion are remarkably similar – to the point that it is very hard sometimes to distinguish the two, as Gary Barlow and other wealthy” tax avoiders” in the UK have found to their cost. And when HMRC tests (allegedly legal) tax avoidance schemes in court, it is often found that the borderline has been crossed and the intent of the relevant tax laws breached. In those circumstances, avoidance and evasion may be considered two sides of the same coin - “weasel words” designed to cloak the sometimes legal / sometimes slippery practices / sometimes illegal practices of well-paid tax accountants and lawyers looking for opportunities and loopholes in the wording of tax laws.